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How to switch from Group Health Insurance to Individual Health Insurance

Team AckoJan 17, 2024

The most significant advantage of a Group Health Insurance Policy for employees is that the employer pays the policy premium. This means the insurance cover is free of cost for an employee. However, when the employee parts ways with the employer, the coverage stops, as the employee is no longer a part of the insured group of employees. If you are such an employee and wonder how to switch from Group Health Insurance to Individual Health Insurance, read ahead to know the details.

Contents

Switching from Group to Individual Health Insurance
Factors to consider while converting from Employer Health Insurance to Individual Health Insurance
Group Health Insurance to Individual Health Insurance shifting process
Benefits of shifting from Group Health Plan to an Individual Health Plan
Frequently Asked Questions (FAQs)

Switching from Group to Individual Health Insurance

It’s the 2020s. And unlike the period before the 90s, it’s not the norm for employees to stick around with one company for decades. But if you leave your employer and are not employed elsewhere, you will not benefit from employee health insurance.

Note that employer-offered insurance goes by several names such as Group Health Policy, Employer Health Insurance, Corporate Health Insurance, Group Medical Cover, Employer-employee Insurance, Employee Health Scheme, Group Insurance for Employees, etc.

You can switch from the Insurance for Employees Policy to a Retail/Individual Health Insurance Policy by getting in touch with the insurer. You will have to abide by their rules and pay the applicable premium to do so.

If your new employer covers you under a Group Health Plan (from a different insurer), then you can hold on to both your individual plan as well as the new group plan. This way, you will have the cushioning of two health insurance plans.

Factors to consider while converting from Employer Health Insurance to Individual Health Insurance

Here are some factors that you need to be aware of if you are considering converting your Group Health Cover to an Individual Cover.

1. Underwriting

Every health insurance company has their own underwriting process. In this process, they analyse the risks posed in insuring an individual or individuals to determine the appropriate premium.
If you request the insurer to onboard you as an individual policyholder, they will assess your health from a risk perspective and then state whether they want to insure you or not.

2. Medical check-up

As a part of the health assessment process, you might be required to undergo some tests to gauge your current health condition.
The test results can play a major role in determining the payable health insurance premium for an individual policy.
For example, if it’s found that your weight, blood pressure, sugar levels, etc., are on the risky side, then it can lead to a hike in the premium.

3. Inform before the policy expiry

It’s best to inform the insurer about your desire to switch from a group plan to a health plan before the expiration of the group plan.
Thus, it’s best to initiate the switch soon after you decide to leave the company.
Ideally, inform the insurer 30 days in advance to ensure a hassle-free switch.

4. Waiting period

This is the duration of days you need to wait (to raise a claim) after suffering an illness for it to be covered under health insurance.
Usually, Group Health Insurance Plans do not impose a waiting period. However, it might be a requirement in the case of an individual policy.
In case of a switch, the period for which you were covered under the group plan can be considered as the waiting period for an individual plan.
Make sure this waiting period is credited (as applicable) when you switch to an individual plan from the group plan.

Learn more about waiting period for health insurance.

Group Health Insurance to Individual Health Insurance shifting process

Here’s how you can make the shift from a group plan to an individual plan.

Step 1: Select your preferred plan

You need to select an individual plan. Such a plan can be a single holistic plan, or you might have to make a choice between multiple options offering different features and benefits. Some plans can also be enhanced with specific add-ons.

Step 2: Initiate the process

You can initiate the policy shifting process by formally informing the insurer. This can be done via filling out an online/offline form. You might be asked to supplement this form with other documents such as your existing group plan, claim history, health profile, etc. In some cases, you might be asked to undergo a health check-up and attach relevant reports.

Step 3: Completing the documentation

All the documentation mentioned in step 2 needs to be completed well in time, ideally 30 to 45 days before the renewal of the group plan. If the insurer needs further information based on the submitted documentation, they will ask accordingly.

Step 4: Paying the premium

As mentioned earlier, the employer pays the premium of an employer-offered policy. However, as you will be switching from a group plan to an individual plan, you will have to make the relevant premium payment.

This amount will be calculated based on the insurer’s underwriting process and the documentation submitted by you in step 3. It is suggested to go through the policy’s terms and conditions in detail and get all doubts cleared before making the payment.

Step 5: Check the policy

The insurer will issue the policy in exchange for the premium. Verify the policy details; if there are any issues, get them rectified at the earliest.

Also, read; Maternity cover in Group Health Insurance Policy

Benefits of shifting from Group Health Plan to an Individual Health Plan

Here are the benefits of moving from a Group Medical Cover (GMC) to an Individual Health Insurance Policy.

1. Reduces dependency

As an employee, you are dependent upon the employer in the case of a GMC. However, when you have an individual plan, you don’t need to worry about the insurance aspect in case you part ways with the employer.

2. Comprehensive coverage

Although modern GMC plans offer wide-ranging coverage, individual health policies do hold the upper hand when it comes to comprehensive coverage. You can choose the suitable sum insured, opt for add-ons, and pick a long-term cover as well.

3. The waiting period advantage

As mentioned earlier, the waiting period served by you under the group plan shall be considered if you shift to an individual plan as per the applicable terms and conditions. Thus, you don’t have to serve the waiting period (if you have met the required conditions) again for the individual plan.

Key takeaways

Here’s a list of points that you can consider as a takeaway from this article if you consider switching from Group Health Insurance to Individual Health Insurance.

Contact your insurer before the group plan’s expiry date or upon your resignation to make the switch.
You might be required to undergo some tests and submit documents while applying for the switch.
Offering the individual plan is at the discretion of the insurer.
Your served waiting period shall be credited while making the switch.
With an individual plan, you don’t need to depend upon the employer and can avail of comprehensive and long-term health insurance by paying the applicable premium.

Disclaimer: The content on this page is generic and shared only for informational and explanatory purposes. It is based on industry experience and several secondary sources on the internet; and is subject to changes. Please go through the applicable policy wordings for updated ACKO-centric content and before making any insurance-related decisions.

Frequently Asked Questions (FAQs)

Here are some questions and answers that frequently pop up in case of switching from a GMC to an individual policy.

Should I opt out of the employer-offered coverage to buy an individual policy?

As the employer sponsors the employer-offered coverage, there’s no harm in being covered under that plan while you buy an individual policy for yourself. There’s no need to opt out of the group coverage to be insured under individual coverage.

In case I move to a different company, do I have to move the group policy offered by my previous employer to the new employer?

No, the previous insurance coverage will cease to exist when your contract with the employer comes to an end. In case your new employer offers a GMC, you shall be covered under that plan as per the terms and conditions. It’s suggested to discuss the details with the new employer for clarity.

Does an employer pay the premium for the employees’ individual insurance policy as well?

No, the employer usually pays only for the employer-offered insurance. The employee must pay the premium for an individual policy.

For how long does the employer continue to offer GMC after the employee is no longer a part of the company?

Usually, the employer-offered insurance coverage stops as soon as the contract between the employer and the employee comes to an end. It’s best to check with your employer and the insurer for precise details.

Is an employer-offered health cover better than purchasing an individual health cover?

The employer-offered health cover’s major advantage is that the employer usually pays its premium. However, the cover exists till the time the official employer-employee relationship exists. Thus, it’s best to have an individual cover for extra cushioning along with the employer-offered coverage.